Less than a month after ruling on certain preliminary issues, the BVI court has ruled that the Madoff-related claim brought by Fairfield is unsustainable and should be dismissed.
In a judgment handed down today in Road Town the Court held that its previous findings on the preliminary issue of consideration disposed of all but the last paragraph of the Statement of Claim which Fairfield argued was an alternative claim in mutual mistake. Although the Court expressed doubt as to whether such a claim was properly pleaded, the Court found that even a properly drafted mutual mistake claim was not sustainable on that facts. Referring to Bell v Lever Bros  AC 161 the Court found that even if there had been a mistake that the investor and Fairfield shared as to the underlying investment in Bernard L Madoff Investment Securities LLC, Fairfield could still perform its obligations to the investors on a redemption.
Accordingly the Court found that Fairfield's case on common mistake confused (1) a shared assumption the truth of which is a necessary condition for the performance of a particular contract with (2) a shared mistaken assumption about the background against which it was expected that the contract was to be performed. The former case will mean that no contract can, as a matter of law, be concluded. The latter will not.
Read the Court judgment.
Read background on the Fairfield claim.